Exxon Mobil Corp. is suing Australia’s Macquarie Energy in a Texas court in an $11.7 million lawsuit over missed deliveries during last month’s winter freeze in the central United States.
The lawsuit filed by Exxon Mobil’s natural gas business said the massive storm and state declarations of emergencies prevented it from fulfilling its supply commitment to Macquarie Energy, the second largest U.S. gas marketer.
Exxon Mobil is asking the Texas court to rule that the massive storm, caused when an arctic air mass swept the central United States, was a natural disaster.
Such a ruling would allow Exxon Mobil to break its contract with Macquarie without a penalty, overriding a demand from the Australian company that Exxon Mobil cover the wholesaler’s $11.7 million in damages for missed deliveries.
U.S. gas demand and prices soared last month when freezing temperatures hit as far south as Texas, where 4.3 million homes lost power.
A Macquarie spokesperson in Australia declined immediate comment. Exxon Mobil did not reply to a request for comment after normal business hours.
The cold sent spot gas at a West Texas hub to $203.50 per mmBtu on Feb. 16. It also prompted Texas and Louisiana to declare emergencies and direct gas supplies to the states’ power generators.
Australia’s Macquarie was one of the largest winners in the cold snap, benefiting from record U.S. natural gas prices. It could collect a $317 million profit from a weather-related gas binge, analysts said.
Macquarie had rejected Exxon Mobil’s own declaration of a natural disaster, the lawsuit said, but the Australian company later issued its own force majeure declaration over gas it had agreed to provide Exxon in Texas.
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